(FREE) What You Need to Know About The Latest US Sanctions against Russia + Infographic
The relationship between the United States and Russia has been tense lately, and there’s no indication that it will be getting better any time soon. Even before the military invasion in Ukraine, over the past few years, Russian military forces have already invaded several countries on its border, including Georgia; it has also actively sought to influence elections in several more countries, including the United States. As such, it’s no surprise that relations between Russia and the United States have been on an ever-downward spiral over the past few years.
After the discovery of potential war crimes in cities in Ukraine, the US imposed further sanctions against Russia.
What are these new Sanctions about
Sberbank, Russia's largest financial institution, and Alfa Bank, Russia's largest private bank, have been sanctioned entirely. This move will result in the freezing of all Sberbank and Alfa Bank assets that have a connection to the US financial system, as well as the prohibition of US citizens from doing business with them. Sberbank controls roughly one-third of the assets in the Russian banking industry and is systemically important to the Russian economy. Alfa Bank is Russia's largest privately held financial institution and the country's fourth-largest overall.
Russian elites and their family members face full blocking sanctions, including sanctions on President Putin's adult children, Foreign Minister Lavrov's wife and daughter, and members of Russia's Security Council, including former President and Prime Minister of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin. These persons have amassed wealth at the cost of the Russian people. Some of them are in charge of giving essential assistance to Putin's attack on Ukraine. This step disconnects them from the US financial system and freezes whatever assets they have in the US.
The US Treasury barred Russia from paying its debts with cash subject to US jurisdiction. Sanctions do not yet restrict payments on Russian government debt, as long as Russia utilises money outside of US jurisdiction. Russia, on the other hand, is a worldwide financial pariah, and it will now have to choose between depleting its limited money to make debt payments and defaulting.
New investment in the Russian Federation is prohibited, and sanctions on vital Russian state-owned firms have been imposed in their entirety. This may have the biggest impact on businesses. We discuss the impact of both in the next section.
How will businesses be affected?
U.S. businesses should be aware of new sanctions on Russian entities, including financial institutions and energy companies, that came into effect on April 6th. The new measures were part of a broader law passed by Congress last year that was designed to punish Moscow for its alleged meddling in U.S. elections and other acts meant to destabilize democratic processes worldwide. We break down what you need to know about these latest sanctions and their impact on businesses here at home in one infographic: click here or on the Image below!
What impact do these Sanctions have?
In regard to these sanctions, Russian officials say they won’t have much effect. Whether that’s true, US citizens, businesses and businesses outside the US which have American ownership or headquarters are going to be affected. These new sanctions prohibit American businesses from doing business with a great deal of major Russian companies, including Rosneft and Gazprom Neft. Already today, more than 600 global corporations withdraw from Russia.
With the decision by the US to prohibit investment in Russia by US people anywhere in the world. the exodus of the private sector from Russia will continue. It now includes manufacturers, energy companies, large retailers, financial institutions, as well as other service providers such as law and consulting firms. The Russian Federation's global competitiveness is highly likely to be permanently weakened as a result.
Sanctions on vital Russian state-owned firms have been imposed in their entirety. This will prevent any U.S. individual from engaging with these corporations and would freeze any of their assets subject to U.S. jurisdiction, undermining the Kremlin's ability to use the entities on which it relies to enable and fund its war in Ukraine. These organisations have been announced by the Treasury Department.
What should businesses trading with Russia do?
It is important that all businesses conducting trade with individuals or entities of Russian nationality perform Due Diligence on their counterparties and review any business relationships they may have. It is also recommended that you monitor future sanctions lists by governments around the world to ensure you are compliant with global regulations. This will help minimize risk exposure and ensure your business continues operating in a safe and lawful manner.
How we can help
Customs Manager Ltd can help you with this. We offer restricted party screening tools to help you manage your exposure to risk, carry out our due diligence investigation and help you set up an export control and sanctions compliant business.